NEW YORK, January 1, 2026, 15:08 ET
- Brent ended 2025 at $60.85 a barrel after a roughly 19% annual drop; U.S. WTI settled at $57.42, down nearly 20%.
- BNP Paribas expects Brent to dip to $55 in the first quarter of 2026 before rebounding toward $60, with demand flat and supply still growing.
- Forecasters see a 2026 surplus ranging from the IEA’s 3.84 million barrels per day to Goldman Sachs’ 2 million bpd, keeping pressure on prices.
Brent crude is expected to slide toward $55 a barrel in early 2026 as analysts warn that supply will outpace demand after oil posted its steepest annual fall since 2020.
The forecast matters as governments and central banks start the year watching energy costs for inflation, while producers weigh drilling plans and hedging strategies for 2026.
Traders are also looking to OPEC+ for direction ahead of a January 4 meeting, with the group’s next policy move seen as pivotal if prices drift into the low $50s.
Brent futures settled at $60.85 a barrel on Dec. 31, while U.S. West Texas Intermediate (WTI) ended at $57.42. Brent fell about 19% in 2025 and WTI nearly 20%, extending a multi-year losing streak for benchmarks.
BNP Paribas commodities analyst Jason Ying expects Brent to dip to $55 in the first quarter before recovering to $60 for the rest of 2026. “We think U.S. shale producers were able to hedge at high levels,” Ying said, referring to using derivatives to lock in future selling prices and keep production steady even if spot prices fall. Reuters
Morgan Stanley’s global oil strategist Martijn Rats said OPEC+ would likely respond with cuts only if prices fall substantially further, pointing to the low $50s as the area that could force the group’s hand, according to Reuters.
Most analysts expect a 2026 surplus, with estimates ranging from the International Energy Agency’s 3.84 million barrels per day to Goldman Sachs’ 2 million bpd. A surplus means the world is pumping more oil each day than it consumes, swelling inventories and weighing on prices.
OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies including Russia, paused output hikes for the first quarter of 2026 after releasing about 2.9 million bpd into the market since April, Reuters reported.
U.S. data have also reinforced the market’s focus on demand. The Energy Information Administration said crude stockpiles fell by 1.9 million barrels in the week ended Dec. 26, while gasoline rose by 5.8 million barrels and distillates, including diesel and heating oil, climbed by 5 million barrels on strong refining runs. (Reuters)
In the same report, “total product supplied” — a widely watched proxy for demand — dropped by 934,000 bpd to 19.38 million bpd, a decline that can signal softer consumption as the holiday period fades.
Geopolitics remains the wild card, analysts said, even with the market leaning bearish on fundamentals. The United States imposed new sanctions on four companies it said were operating in Venezuela’s oil sector and targeted associated tankers, a move Washington said was part of an intensified pressure campaign on President Nicolas Maduro. (Reuters)
The U.S. action followed a broader push against what officials call a “shadow fleet” — older ships with opaque ownership and limited insurance that transport sanctioned oil — and came after a U.S. blockade announced earlier in December that Reuters said helped cut Venezuela’s exports to about half of November levels.
For now, the tug-of-war is clear: surging supply expectations and swelling inventories point lower, while OPEC+ policy and sanctions-driven disruptions could keep a floor under prices.
The next test comes quickly. Traders will watch the Jan. 4 OPEC+ meeting and early-2026 demand signals for clues on whether Brent stabilizes near $60 — or slips toward the mid-$50s that some banks have penciled in.
